SEOUL, KOREA - A dark cloud hangs over the S. Korean government’s efforts for the commercialization of technologies developed by universities. In 2010-2013, technology holding companies, founded by domestic universities, set up 131 subsidiaries, posting KRW 140 billion in sales and creating 900 new jobs.
However, looking back over the past four years, it’s clear that they have yet to make a good showing. Some prestigious university, located in Seoul, founded a technology holding company through the Small and Medium Business Administration (SMBA)’s Fund-of-Funds (FOF) program, with a view to creating numerous university-initiated start-ups. The bottom line was that only 3% of the technology holding company’s business items originated from the university. With a focus on profitability, the tech holding company made heavy investments externally.
The Park Geun-hye government has been rigorously chanting “creative economy,” pledging to soup up the Korean economy by commercializing an amalgam of knowledge and creativity. Such a government pledge raised expectations for back-to-back establishment of university-initiated start-ups, which have a chance of growing into Facebook. Though the idea behind the government’s push for university-initiated start-ups was good, its results are disappointing as of now. Even though the government has been proactively promoting universities’ technology holding companies, they have yet to measure up to expectations. The problem is that they do not have the guts to confess that their business is far from booming because they know such honesty could lead to a permanent shutdown of their businesses. The government is keeping a wary eye on them to whip off slackers. Therefore, technology holding companies, set up under universities, are pretending to be busy working on something.
Then, why are technology holding companies, established by universities, trading water The concept itself is wrong. Those, who are intrinsically risk-, adventure-averse, choose holding a professorship over starting their own business since professors are educators who enjoy a sense of job security in the nation. And students are not taught basic skills needed for starting their own businesses. Tasking professors and students with the undertaking of starting a business can be likened to dispatching farmers to a battlefield. Most of them will be killed in battle or end up running mom and pop businesses. Expecting them to create businesses that could rejuvenate the Korean economy is absurd. Then, why is the US a different story There is a plethora of venture funds that say, ‘It’s ok to go bust, so don’t be afraid of taking risks.’ On top of that, US venture funds wait patiently until they discover some entrepreneur, who will eventually hit the jackpot for them. Besides, failed entrepreneurs are given a number of new opportunities to bounce back in the US.
How can we make tech start-ups boom on Korean soil The answer can be found somewhere else. The answer comes from companies and research institutes, not universities. When the Asian financial crisis 1997-1998 hit the nation, engineers, who got fired from their companies or research institutes, breathed life into a venture boom in the nation. Ample funds flowed in, revving up the creation of start-ups to a great degree. Of course, there were hiccups, but their entrepreneurialism played a role in helping nation ride out the Asian financial crisis 1997-1998.
As of now, KT Corporation, construction companies, securities firms, etc. are going through a restructuring, which would entail massive layoffs of employees, armed with managerial expertise and technical skills. The employees, soon to be put on the job market, know what the market is like. They also know how to run a business. Their technological prowess has been proven. If the government set its sights on this pool of highly-skilled workers, Korean tech start-ups would have a better chance of survival.
It is ideally good to commercialize the results of academic researches, which went through a long period of development processes, from basic science to application and development. That being said, expecting curiosity-driven academic researches to make a great contribution to product development is inappropriate. The government’s policy to promote tech start-ups should urgently change its course because Korean universities are not ready for creating a slew of start-ups in the nation.
